Veteran bankers Todd Massas, left, and Adam Seery, founders of Harvest Commercial Real Estate Finance, will use the Small Business Lending Co. license they were granted by the U.S. Small Business Association to help businesses considered credit risks by more traditional lenders.

Veteran bankers Todd Massas, left, and Adam Seery, founders of Harvest Commercial Real Estate Finance, will use the Small Business Lending Co. license they were granted by the U.S. Small Business Association to help businesses considered credit risks by more traditional lenders.

— For the past eight years, San Diego County residents Adam Seery and Todd Massas watched as their fellow bankers stuck to strict lending guidelines and denied loans to business owners caught up in the 2007 recession. Bankers don’t want to hear the recession hurt a business, Massas said. “The minute they hear that, they’ll say an individual is not a good credit risk,” he said.

In an attempt to help those small business owners keep their companies not only running, but growing, Seery and Massas put their combined 43 years of banking and finance experience to work and opened Harvest Commercial Real Estate Finance.

What separates Cardiff-by-the-Sea-based Harvest from other direct-lender finance companies is that Harvest is a Small Business Lending Company or is SBLC licensed. What that means is Harvest has the ability to act as a nonbank 7a lender, in which the government guarantees 75 percent of the loan. Only 14 such licenses exist in the United States.

Getting the License

Seery and Massas, who are both chief origination officers and managing directors of Harvest, obtained their SBLC license from the U.S. Small Business Administration (SBA) after the previous owner’s possession of the license was revoked by the U.S. Securities and Exchange Commission for his alleged involvement in a ponzi scheme. After a long vetting process with the SBA, Seery and Massas’ license was approved in February.

Strict rules apply to the license, and the SBA monitors the lenders’ activity.

“In my personal experience, I’ve seen lots and lots of good businesses out there that need financing and these [SBLC] kinds of loan dollars help create and retain jobs,” Massas said.

Harvest is the only San Diego area SBLC-licensed lender; there also are lenders in Irvine, Los Angeles and Walnut Creek.

“We ultimately have the ability to enhance the business community by lending in this area,” Seery said. “Essentially, we’re going to put more loan dollars on the street than what is currently available for small business owners.”

Banks may reject a loan applicant because the bank doesn’t like the regulatory environment or doesn’t want to do business with nonclients, Massas said. Oftentimes, the minute a banker learns a business owner was caught up in the recession, a loan application is rejected because the individual is seen as not being a good credit risk.

While the two are critical of banks, neither fully blames the banks for their reserved approach. “They are not built to solve problems or hear customers out,” Massas said.

Unlike banks, “we are problem-solvers,” he said. “Our secret to success is understanding what we’re dealing with, appropriately understanding clients and understanding their story so we can properly represent them as part of this [lending] process.”

Backed by New York-based Candlewood Investment Group, Harvest opened shop in April. As a direct lender, the loan money “comes from us,” Massas said.

“In our commercial finance world, this is a big deal,” Seery said about the creation of Harvest. “People understand the ramifications.”

Value-Added Lending

While big banks continue to operate with a rotating door, Seery said he and Massas have been engaged in value-added lending for a long time and have had a positive impact not only on small business owners who receive a loan, but brokers, mortgage brokers, CPAs, attorneys and more.

The two worked at Orange County-based Plaza Bank, which they said they helped grow from $80 million in assets in 2009 to over $1 billion in 2015. Both also worked at Lehman Brothers Small Business Finance.

Seery and Massas’ goal is to fund $120 million in commercial real estate within the first 12-15 months of Harvest’s launch. If they achieve their goal, Harvest would be a top 7a loan lender within the state of California. Seery admits the two have “very high goals,” but they are attainable thanks to Harvest’s sales and office support team.

Harvest currently employs a team of six, but the plan is to hire up to 40 business development officers in the next four years as the business expands —nationwide, it is hoped.

“Our goal is to be a top five nationwide lender in the next four to five years,” Seery said.